“On October 30, 2023, the Biden Administration released Executive Order (E.O.) 14110 on Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence. It establishes a government-wide effort to guide responsible artificial intelligence (AI) development and deployment through federal agency leadership, regulation of industry, and engagement with international partners.” - Congressional Research Service
Artificial intelligence (AI) is poised to redefine how businesses work. Unleashing the power of data, AI has proven to help businesses with customer service, marketing, training, pricing, security, and operations. AI is so powerful that for many businesses to remain competitive, they will need to adopt and leverage AI to keep pace with existing peers and digitally native market entrants.
As with most technology advancements, AI comes with its own set of risks, both pragmatic and ethical. For this reason, federal leaders are working to manage AI risk through a combination of policy development, regulatory oversight, research investment, and international collaboration.
What role does risk management play in an organization?
Risk management helps organizations identify potential risks and uncertainties that could affect their ability to achieve strategic, operational, financial, or compliance objectives. This includes both internal and external risks such as market volatility, regulatory changes, cybersecurity threats, operational failures, and reputational risks. For these reasons risk management plays a critical role in helping organizations navigate uncertainty, protect value, and achieve their objectives in a rapidly evolving business environment. It is an integral part of strategic decision-making, governance, and operational excellence across all levels of an organization.
How Artificial Intelligence is Benefitting Risk Management Practices
In many ways AI is revolutionizing risk management by providing advanced analytical capabilities, automating manual processes, and enabling organizations to proactively identify, assess, and mitigate risks in real-time. By leveraging AI technologies, organizations can enhance their risk management practices, improve decision-making, and achieve better outcomes in an increasingly complex and dynamic business environment.
But like we have seen in numerous sci-fy stories, any technology with a lack of human oversight and control can lead to errors, misinterpretations, and unintended consequences.
The Risks of Artificial Intelligence
While AI offers numerous benefits to businesses, it also introduces several risks that organizations need to consider and manage effectively.
AI systems rely on vast amounts of data to train algorithms and make predictions. However, this data often contains sensitive information about individuals, such as personal, financial, or medical data. Inadequate data privacy and security vulnerabilities in AI systems can lead to data breaches, privacy violations, and regulatory non-compliance.
Here Are 5 Risks AI Can Create For Your Business:
Data Breaches: AI systems often rely on large amounts of data, and any vulnerabilities in these systems could lead to data breaches. Malicious actors may exploit weaknesses in AI algorithms or infrastructure to gain unauthorized access to sensitive information.
Model Poisoning: In model poisoning attacks, attackers manipulate training data to compromise the integrity of AI models. By injecting malicious data into the training set, attackers can influence the behavior of the AI system, potentially leading to erroneous outputs or decisions.
Privacy Risk: AI systems that process sensitive data may inadvertently reveal personally identifiable information or other confidential data. Poorly designed AI algorithms or insecure data handling practices could expose individuals to privacy risks, leading to regulatory non-compliance and reputational damage for businesses.
Lack of Transparency: AI models are difficult to understand and overall there is a lack of transparency in how and why AI comes to its conclusions. This lack of explanation for the data AI uses can lead to unsafe decisions being made within an organization.
Exposure of Intellectual Property: When a person within an organization does something wrong they are held accountable, but what about AI? AI algorithms and models developed by businesses represent valuable intellectual property. Unauthorized access to these assets could enable competitors or malicious actors to replicate or exploit proprietary AI technologies, undermining a company's competitive advantage.
Additionally, AI technologies raise ethical and societal concerns related to autonomy, accountability, and human rights. Automation of tasks previously performed by humans can lead to job displacement, economic inequality, and social disruption. Ethical dilemmas may arise when AI systems make decisions with ethical implications, such as in healthcare, criminal justice, or autonomous vehicles.
How Can Organizations Protect Themselves Against Artificial Intelligence Risk?
At DataLock Consulting Group we believe cybersecurity is paramount and organizations should be proactive in safeguarding themselves against AI threats.
No matter where business leaders stand on incorporating AI into your business systems it is important to bring “safety” into the conversation. If you are going to move forward with AI in your organization in any capacity you want to make sure you are moving forward in a safe manner.
Step 1: Identify & Assess Threats
Systematically identify, assess, mitigate, and monitor risks throughout the AI lifecycle with a robust risk management program. After identifying potential AI-related threats such as data security, algorithmic biases, and adversarial attacks, you should then conduct a thorough risk assessment across various stages of the AI lifecycle, including data collection, model development, deployment, and maintenance.
Step 2: Continuous Monitoring & Incident Response Testing
Implement mechanisms for ongoing monitoring and surveillance of AI systems to detect and respond to emerging threats in real time. Utilize techniques such as security analytics, threat intelligence feeds, and automated monitoring tools to identify anomalous behavior and potential security incidents promptly. Additionally, regularly test your incident response plans specific to AI-related security incidents. This will better help you create a contingency plan and outline procedures for containing and mitigating security breaches.
Step 3: Employee Awareness & Training
Provide comprehensive training and awareness programs for employees involved in AI development, deployment, and management. Educate staff about AI-related risks, security best practices, and ethical considerations to foster a culture of security awareness and accountability across the organization.
By integrating risk management principles into all aspects of AI development, deployment, and operation, organizations can effectively mitigate the inherent security risks associated with AI technologies and safe guard their assets, reputation, and stakeholders' trust.